DESCRIPTION OF THE PROVISIONAL ITALIAN RETIREMENT PENSION SCHEME

Transcription

1 Annex 2 DESCRIPTION OF THE PROVISIONAL ITALIAN RETIREMENT PENSION SCHEME further to Annex III of the Rules governing the payment of expenses and allowances to Members 1. Introduction to the provisional Italian retirement pension scheme Prior to the entry into force of the Statute for Members (14 July 2009), retirement pensions for Members of the European Parliament were payable by each Member State. However, not all Member States ensured equal treatment between Members of their national parliaments on the one hand and Members of the European Parliament on the other with regard to pensions. In order to correct this disparity, the European Parliament adopted Annex III to the Rules governing the payment of expenses and allowances to Members (PEAM Rules). Under Annex III to the PEAM Rules, where the level and/or conditions of the pension payable by the Member State to Members of the European Parliament are not identical to those applicable to Members of the lower house of the parliament of that Member State, the European Parliament pays a provisional pension in order to establish equality between the pensions. These arrangements were applicable those who served as Members of the European Parliament before July 2009, having been elected in Italy. Members of the national parliament contributed to a special scheme administered by the Camera (Italian lower house), while Members of the European Parliament did not contribute to any national pension scheme. The European Parliament accordingly set up a compensatory scheme for Italian former Members, referred to hereafter as the 'PEAM Annex III scheme for Italian Members'. Membership thereof required the payment of contributions to the European Parliament. On 14 July 2009, the Statute for Members entered into force. This affected the scheme in two ways: 1. Perpetuation of entitlements acquired - before the date of entry into force - by deferred pensioners and pensioners; 2. Members sitting in Parliament after that date were debarred from acquiring additional rights under the scheme. Specifications Actuarial pensions studies - 1/5 - Annex 2 Italian pension

2 2. Legal basis The provisions applicable are as follows: Annexe III of the Rules governing the payment of expenses and allowances to Members of the European Parliament (PEAM); Regolamento per gli Assegni Vitalizi dei Deputati (Camera dei Deputati) (Regulation on life annuities applicable to Members of the Italian Chamber of Deputies); Article 28 of the Statute for Members of the European Parliament; Article 75 of the Implementing Measures for the Statute for Members of the European Parliament. 3. Acquisition of pension rights Rights were acquired by paying contributions to the European Parliament. Since July 2009, no one has any longer contributed to the scheme. The minimum period of contribution for entitlement to a pension is five years. If contributions are paid for less than five years, two options are available: o Contributions paid for less than two-and-a-half years If the Member has acquired no national entitlements, the European Parliament must reimburse the contributions paid plus interest. If the Member has acquired national entitlements he or she may: accumulate European Parliament and national parliament entitlements or request reimbursement of contributions paid to the European Parliament plus interest. o Contributions paid to the European Parliament for more than two-and-half years and less than five years If the Member has acquired no national entitlements he or she may: request reimbursement of contributions to the European Parliament plus interest or purchase entitlements for the remainder of the five-year period. If the Member has acquired national entitlements he or she may: accumulate European Parliament and national parliament entitlements or request reimbursement of contributions to the European Parliament plus interest or purchase entitlements for the remainder of the five-year period (this option is available only if the national term of office ends before the commencement of the European Parliament s electoral term or if resignation for incompatibility is not owing to nomination to the Chamber or Senate). 4. Subscribers to the scheme At the end of 2016, the breakdown by category of the number of subscribers was as follows: Number of subscribers Deferred pensioners 66 Recipients of retirement pension 149 Recipients of survivor's pension 46 Specifications Actuarial pensions studies - 2/5 - Annex 2 Italian pension

3 5. Payment of retirement pensions Pensions are payable under the PEAM Annex III scheme for former Members elected in Italy on the same legal basis as that applicable to Members of the national parliament (Regulation on life annuities applicable to Members). For entitlement to a retirement pension, former Members of the European Parliament elected in Italy must meet the following conditions: They must have contributed for five years; They must be over 65 years of age. However, for each additional year in office, the age limit is reduced by one year, down to a minimum of 60 years of age; They must not occupy certain incompatible posts; They must apply for payment of their pension within a specific deadline. 6. Calculation of pension rights Pensions are calculated on the basis of number of years of contributions paid. Parts of a year are counted as a full year if contributions have been paid for over six months. The percentage of rights acquired is as follows: Years of Percentage of rights acquired contribution 5 years % (minimum) 6 years % 7 years % 8 years % 9 years % 10 years % 11 years % 12 years % 13 years % 14 years % 15 years % 16 years % 17 years % 18 years % 19 years % 20 years % 21 years % 22 years % 23 years % 24 years % 25 years % 26 years % 27 years % 28 years % 29 years % 30 years % 31 years % 32 years % 33 years % 34 years % 35 years and more % (maximum) Specifications Actuarial pensions studies - 3/5 - Annex 2 Italian pension

4 The maximum pension is % for Members elected before 31 May 2001 and 80% for those elected after that date. The European Parliament calculates terms of office in both the national parliament and the European Parliament but pays only the pension entitlements for which it is responsible. Two options are available: 1. Separate pension rights at national and European Parliament level respectively (only possible in respect of contribution periods of five years or more with the option of paying additional contributions to make up any shortfall). Rights acquired under the two schemes are calculated separately and the two percentages added, with two possible results: a) If the amount exceeds 85.50% (maximum acquired rights): the percentage payable in respect of terms of office in the European Parliament is reduced so that the sum of the two sets of entitlements does not exceed %. b) If the amount is less than %: the European Parliament considers only the percentage of rights acquired in respect of the period for which it is responsible. 2. Concurrent European Parliament and national pension rights (obligatory if contributions have been paid for less than two years and six months. Buyback is not permitted). Two situations may arise, depending on whether the pension rights are concurrent with those accruing from the Chamber or with those accruing from the Senate of the Italian Parliament. a) Pension rights concurrent with those accruing from the Chamber of Deputies The total number of years of contribution under the two schemes is added. A total percentage of pension rights acquired is then established in accordance with the relevant chart. The rights accruing from the national parliament are then deducted from the total. The percentage accruing from the European Parliament is the difference between the total percentage and that accruing from the national parliament. In all the above cases, the European Parliament pension entitlement is equal to: Rights acquired Percentage of pension rights accruing from the EP x Parliamentary salary on which pension payment is based (Parliamentary salary on which pension payment is based = EUR Pension rights are calculated on the basis of the monthly parliamentary salary (currently amounting to EUR ,32) when the pension first falls due. b) Pension rights concurrent with those accruing from the Senate The total number of years of contribution under the two schemes is added. The total percentage of rights acquired is then established in accordance with the relevant chart. The total pension is then calculated as follows: Percentage of rights acquired for the total number of years x (Parliamentary salary on which pension payments are based) = EUR The total pension is payable proportionally by the Italian Senate and the European Parliament, depending on the number of years contributed under each scheme. Specifications Actuarial pensions studies - 4/5 - Annex 2 Italian pension

5 In both cases, the European Parliament pays the percentage of the pension entitlement accruing from the Member's term of office to the Chamber of Deputies or to the Senate, which then pay the Member's pension. 7. Survivor s pension If the Member was of pensionable age, the survivor s pension is equal to 60% of his or her pension entitlement. If the Member was not of pensionable age, entitlement to a survivor s pension takes effect on the date when the deceased Member's entitlement falls due. From 1 January 1994, Members have designated their beneficiary or beneficiaries. The may designate their spouses or their children. For entitlement to a survivor s pension, the Member must have paid the quota contributiva aggiuntiva (additional contribution) introduced on 1 January The widows/orphans of Members who ceased payment of their contributions on 31 December 1993 are entitled to the pension without payment of this contribution. Since January 2001, Members have been permitted to pay the necessary contribution at any time, albeit in a single instalment. 8. Early retirement and lump-sum payment The scheme has never included early retirement arrangements. The full or partial payment of pension rights as a lump sum has never been permitted. 9. Financing of the scheme This pension scheme is not based on the capitalisation of Members' contributions and is funded entirely from the European Parliament's budget. Specifications Actuarial pensions studies - 5/5 - Annex 2 Italian pension